Terry_wStructuring Lawyer and Finance Broker - all statesBusiness Member

If someone holds units in a trust which holds real property in QLD and the units are transferred the transferee (recipient) of the units will pay stamp duty on the unencumbered value or the units or the purchase price whichever is higher.

This applies also to a trust which has entered a contract but not settled on the purchase. Any restructuring needs to be done before contracts are entered into or duty will be payable twice - once on the transfer of land and once on the transfer of units.

Duty is also payable on a surrender of units. If the trustee were to redeem units of the trust for example the duty would be payable on the value of the units.

Example

Tom sets up a unit trust with a company as trustee and Tom as the unit holder. The trustee company enters into a contract on Saturday to purchase a property for $1million. It is an auction so contracts are unconditional. On Monday Tom seeks advice from his tax agent and decides it would be better for the units to be owned by a discretionary trust. Tom causes the units to be transferred to the trustee of a discretionary trust on Tuesday. The trustee settles on the purchase a month later.

There will be 2 lots of stamp duty to pay. Duty by the trustee of the unit trust on the transfer of land at $1mil and duty by the trustee of the discretionary trust on the transfer of units at $1mil.

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